Troubled Iceland looks at EU membership

Iceland's new government will soon press parliament to vote on whether the country - badly shaken by the global financial crisis - should apply for European Union membership.

Prime Minister Johanna Sigurdardottir says her left-wing coalition will introduce a resolution shortly after the newly-elected parliament meets for the first time on Friday.

"It will be in the first days after the inaugural session - we insist that a membership application be sent to the EU before July," the Social Democrat said.

The coalition released a general policy paper stating that it will ask the parliament, elected last month, to vote on whether to apply for EU membership.

But voters will have Iceland's last word via a referendum, the document said, acknowledging divisions between Social Democrats and their Eurosceptic coalition partners of the Left Green Movement.

Iceland's left-wing coalition scored a historic election victory on April 25, becoming the majority in parliament for the first time after the Social Democrats and the Greens won a combined total of 34 of the 63 seats.

The conservative Independence Party, which had faced street protests over its handling of the economy, was ousted after 18 years in power.

A Capacent Gallup poll released Wednesday by RUV radio showed that 61 per cent of Icelanders were in favour of opening EU accession talks while nearly 27 per cent were against it.

Support for EU negotiations has soared since Iceland's once-booming financial sector crumbled in October, pushing thousands of the country's 320,000 inhabitants out of their jobs as their savings evaporated.

Prior to the crisis Iceland was among the world's most prosperous nations, with growth averaging 4 per cent a year, but momentum slowed to just 0.3 per cent in 2008 and its economy is expected to contract by nearly 10 per cent this year.